Honda and Nissan on Monday announced discussions to merge, aiming to create the world’s third-largest automaker by sales.
The two companies plan to establish a holding company listed on the Tokyo Stock Exchange by August 2026.
Honda CEO Toshihiro Mibe stated that the merger would enable both companies to achieve economies of scale and synergies in electric vehicles and intelligent driving technologies. He added that the integration depends on Nissan completing its turnaround plan. Nissan CEO Makoto Uchida emphasized that the talks aim to strengthen competitiveness for future growth.
The combined entity is projected to generate revenue of 30 trillion yen ($191 billion) and an operating profit exceeding 3 trillion yen. Honda will nominate the majority of the board members for the holding company.
Talks are expected to conclude by June 2025, with shares of both companies to be delisted upon completion. Nissan’s strategic partner, Mitsubishi Motors, has been invited to join the merger and will decide by January 2025.
If included, the group’s global sales could exceed 8 million cars annually. The move would rank the group ahead of Hyundai-Kia but behind Toyota and Volkswagen.
Both automakers face growing competition in the electric vehicle market from Tesla and BYD.
Honda and Nissan reported declining sales in China, contributing to broader challenges. Nissan recently announced plans to cut 9,000 jobs and reduce production capacity by 20%.
Former Nissan Chairman Carlos Ghosn, a fugitive in Japan since fleeing to Lebanon after his 2018 arrest for financial wrongdoing, expressed skepticism about the merger, citing a lack of complementarity between the automakers. Renault, Nissan’s largest shareholder, indicated willingness to consider the deal’s implications.
Following the announcement, Honda shares rose 3.8%, Nissan increased 1.6%, and Mitsubishi Motors gained 5.3%.
